Bulls may test 1.2900/50 near term – Scotiabank

The British pound (GBP) has been marginally better performing among the majors so far, with gains underpinned by further signs of a revival in economic growth.

GBP is set to rise towards 1.2900/50

“June GDP was unchanged this month, as expected, while UK GDP rose 0.6% qoq, also in line with expectations. June Industrial production increased by 0.8% m/m more than forecast. Output rose 1.1 percent, well ahead of calls for a 0.2 percent increase. Firm growth trends will not prevent the BoE from cutting rates again in the next few months, but the tilt in the data risks a bit more against a move in September.”

“Sterling’s recovery from the upper 1.26s has stalled over the past two sessions, but price patterns are still tilted bullish for sterling as spot consolidates gains. A bullish flag/wedge pattern can develop on the intraday chart. Gains to 1.2865/75 over the next day should be an indicator for a resumption of GBP’s rise towards 1.2900/50.”